Vienna's Economy in the Business Cycle. Development of Concurrent and Leading Indicators of Economic Development

Drawing on state-of-the-art methods of business cycle research, the study analyses the course of economic activity in Vienna and its time correlations using regional and national time-series data from business surveys, labour market statistics and polls. The collective indicators thus obtained allow us to promptly identify the current situation of Vienna's business community ("concurrent indicator") as well as obtain early information on the incipient short-term development of its economy ("leading indicator"). To this end, a total of 113 data series using a quarterly basis were tested for their potential as leading and concurrent indicators against the gross value added in real terms in Vienna as reference series. Of these, six indicators showed concurrent properties and 11 showed leading properties that were statistically robust in terms of the reference business cycle, and they could thus be included in the collective indicators to be created. An ex-post analysis based on statistical test methods confirms the excellent suitability of collective indicators for the period of 1996-2010. The business cycle indicators have the desired cyclical properties and they perform well when identifying turning points. As new tools for business cycle reporting and forecasts they thus appear both useful and helpful.